Pathnet Selects Fiber From Lucent
Technologies for its Nationwide Network
WASHINGTON, D.C., Feb. 3 /PRNewswire/ -- Pathnet, Inc., a privately held ''carrier's
carrier'' of digital telecommunications capacity to under-served and second-and third-tier U.S.
markets, announced today that it has selected Lucent Technologies (NYSE: LU - news) to be the
exclusive supplier of fiber-optic cable for its nationwide, voice and data network. The
agreement is initially valued at $440 million and could grow up to $2.1 billion over the life of
the seven-year agreement. This represents potentially the single largest fiber supply agreement to
a network operator in the United States.
Pathnet previously announced plans to expand its business strategy from the development of
wireless networks to a broader, integrated strategy employing both wireless and fiber-optic
technologies in its networks. The Lucent supply agreement provides a broad level of support to
that effort, including fiber-optic equipment, network planning and design, technical and
marketing support, and financing. Pathnet fiber facilities will be constructed and deployed on
selected routes, and the company will integrate those routes with its existing and future wireless
facilities.
Under the agreement, Pathnet will use Lucent's TrueWave (R) RS (reduced slope) fiber, a
revolutionary new fiber for long-distance networks developed by Bell Labs. Lucent has agreed
to provide equipment financing of approximately $400 million for the first phase of the network
construction. Lucent may provide or arrange financing for future phases of the fiber portion of
Pathnet's network, in amounts of up to $400 million for each phase, provided Pathnet fulfills
mutually agreed upon terms. The total amount of financing over the life of this seven-year
agreement is not to exceed $1.8 billion.
''Pathnet's plan has long been to create the industry's most extensive, low-cost network coverage
to the under-served and second- and third-tier markets for voice, data and Internet carriers,'' said
Dick Jalkut, president and chief executive officer of Pathnet. ''Our relationship with Lucent
allows us to leverage our early wireless success while giving us the flexibility to accelerate
complimentary fiber development over the next several years.''
''We are extremely pleased to be part of Pathnet's plans for a high-capacity, data and voice
network, and we're delighted they chose our industry-leading TrueWave fiber,'' said Nina
Aversano, president, North America for Lucent's Global Service Provider business. ''The
combination of Lucent's expertise in designing networks, our relationships within the industry
and Pathnet's innovative approach to creating a nationwide network gives service providers an
efficient way to meet the ever-increasing demand from their customers for more bandwidth.''
Pathnet will continue to rely on its traditional approach of partnering with railroads, pipelines,
utilities and other owners of telecommunications assets for rights-of-way throughout the United
States. Pathnet expects that by broadening its partnering arrangements to include fiber, it will be
able to offer customized networks to service providers. Through partnering, co- development
and the establishment of anchor tenants, the company expects to minimize the costs of its retained
network. Pathnet will utilize Lucent's fiber products to deliver bandwidth services as well as
dark or dim fiber to customers requiring dedicated network services in markets that are currently
under-served. As with its wireless network, Pathnet will serve as the network designer and
project manager for the overall fiber build-out.
Lucent Technologies has the largest combined optical fiber and fiber cable operations in the
world. TrueWave RS fiber is part of the company's award winning TrueWave product line and
represents the next-generation in fiber optics, giving long distance providers increased capacity
and a future-proof solution for emerging high-speed Dense Wavelength Division Multiplexing
(DWDM) systems. It is manufactured in Lucent's Atlanta Works facility.
Lucent Technologies designs, builds and delivers a wide range of public and private networks,
communications systems and software, business telephone systems and microelectronic
components. Bell Labs is the research and development arm for the company. More information
about Lucent Technologies, headquartered in Murray Hill, N.J., is available on its Web site at
www.lucent.com.
As of December 31, 1998, Pathnet had 2,000 route miles of completed network, an additional
5,000 route miles of network under construction and 10,000 route miles of network under
contract. Pathnet provides commercial telecommunications service to inter-exchange carriers,
local exchange carriers, Internet service providers, Regional Bell Operating Companies,
cellular operators and resellers. The company is a ''carriers' carrier'' providing high capacity,
wireless and fiber bandwidth to under-served and second- and third-tier markets. Pathnet's
strategy is to build low-cost telecommunications networks through partnering arrangements. The
company's headquarters are located in Washington, D.C., at 1015 31st Street, N.W., Washington,
D.C., 20007. For additional information about Pathnet, visit the company Web site at
www.pathnet.net.
This press release contains some matters that are forward-looking statements. The reader is
cautioned that these forward-looking statements, such as plans to sign additional agreements with
private network operators; offer services to telecom service providers; enter into partnering, co-
development and anchor tenant arrangements; building a digital network; and statements
regarding the development of Pathnet's business, and other statements contained herein regarding
matters that are not historical facts, are only predictions. No assurance can be given that the
future results will be achieved; actual events may differ materially as a result of risks facing
Pathnet. For a discussion of factors that could affect the forward-looking statements, see
Pathnet's public filings on file with the Securities and Exchange Commission.
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